Canada Now Expected To Raise Rates Even More To 4% Say Big Banks

[Economy 52,842]

https://www.bnnbloomberg.ca/bank-of-canada-rate-hike-here-s-what-economists-are-expecting-1.1834835

 

After inflation readings came in hotter than expected today at nearly 7% over last year, market expectations are that interest rates will go up 75 basis points at next week's meeting instead of 50 basis points

 

Canada already has the highest interest rate in the developed world at 3.25% (closely trailed by the United States at just over 3%)...

 

If the hike comes as major bank analysts forecast, that will take the rate to 4%, the highest rate in nearly 15 years.

 

 

[Economy 52,842]

This feels high based on what were used to, yet in real terms that's still negative rates

 

If u adjust for inflation that's still a -3% rate in real value

 

Wage gains are lower than inflation at about 5% but even by that measure the real rate would be -1%.

 

That probably part of the reason it's not braking the economy quite as quickly as Central Bankers and some analysts predicted at the beggining of the hiking cycle